Volume 2 - Opinions of Counsel SBEA No. 44

Title to real property must be vested in the owner or all of the owners (or one of the owners if owned by a husband and wife) for at least sixty consecutive months prior to date of application for exemption. Transfer of title from parent to child and child to parent interrupts the chain of title in both cases. An otherwise qualified person will not be eligible for the exemption until such time as five years have elapsed from the creation of the new title.

We have received an inquiry concerning the ownership requirement for the partial real property tax exemption for persons sixty-five years of age or older authorized by section 467 of the Real Property Tax Law. The specific question concerns a transfer of title from a parent to a child and back to the parent several months later.

Section 467 provides that a legal residence which is owned and occupied by the owner, or owners if there are more than one, each of whom is sixty-five years of age or over, or one of whom, if owned by a husband and wife, may be exempt from taxation by any municipality in which it is located to the extent of 50 percent of the assessed valuation. Pursuant to the provisions of subdivision 3(b) of this section, no exemption may be granted unless title to the property shall have been vested in the owner or all of the owners of the property, or one of the owners if owned by a husband and wife, for at least 60 consecutive months prior to the date of making application for the exemption.

Where the possessor of a sole interest in a parcel of land transfers title to another person or persons or where such sole possessor adds additional names to the deed, as in the creation of a joint tenancy, a new title or interest is created (exception is made for transfer between spouses).

Similarly, when two persons with joint ownership transfer their interest to another person, a new title or interest is created. The conveyance of title from a parent to a child and from the child to his parent interrupts the chain of title in both cases. In both cases title is vested anew. Since the statute provides that title to the property shall have been vested in the owner or owners for at least sixty consecutive months prior to making application for exemption, an otherwise qualified person would not be eligible for exemption until such time as five years have elapsed from the creation of the new title.

Undoubtedly, this requirement was imposed by the Legislature to discourage conveyances among relatives in order to secure this exemption. Statutes granting exemptions from taxation must be strictly construed (Herkimer County v. Village of Herkimer, 251 App. Div. 126, 295 N.Y.S. 629) which means that a property owner must comply with all the terms and conditions of the statute in order to qualify for exemption. An assessor may not legally grant an exemption in cases where the statutory conditions are not satisfied.